Baron Funds, an asset management firm, published its “Baron Partners Fund” second quarter 2021 investor letter – a copy of which can be downloaded here. An increase of 4.83% was delivered by the fund’s institutional shares for the Q2 of 2021, trailing the Russell Midcap Growth Index which increased 11.07%. for the same period. You can take a look at the fund’s top 5 holdings to have an idea about their top bets for 2021.
In the Q2 2021 investor letter of Baron Funds, the fund mentioned Hyatt Hotels Corporation (NYSE: H) and discussed its stance on the firm. Hyatt Hotels Corporation is a Chicago, Illinois-based hospitality company with a $7.2 billion market capitalization. Hyatt delivered a -3.54% return since the beginning of the year, while its 12-month returns are up by 19.39%. The stock closed at $71.62 per share on September 3, 2021.
Here is what Baron Funds has to say about Hyatt Hotels Corporation in its Q2 2021 investor letter:
“Shares of Hyatt Hotels Corp., a global hotelier, declined in the quarter due to investor concerns around a new, more contagious variant of COVID-19 and a reopening of Asia and Europe that was slower than market forecasts. While the slowed reopening is a disappointment, Hyatt’s domestic business and group bookings are starting to return, and we think conditions will normalize by 2022, at least domestically. The company remains on track with its asset sale program as the hotel transaction market returns to pre-pandemic valuations, which should make Hyatt a more valuable, fee-based business.”
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Based on our calculations, Hyatt Hotels Corporation (NYSE: H) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. Hyatt was in 23 hedge fund portfolios at the end of the first half of 2021. Hyatt Hotels Corporation (NYSE: H) delivered a -9.34% return in the past 3 months.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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Disclosure: None. This article is originally published at Insider Monkey.
